Meals Tax Is On The Ballot

Published 4:49 pm Thursday, September 20, 2012

BUCKINGHAM – In November, when county residents go to the polls, their ballot will include a referendum about a prepared food and beverage tax, often referred to as a meals tax.

Along with casting their vote for the candidates of their choice, voters will have the opportunity to respond yes or no to the following question, Should the Board of Supervisors of Buckingham County, Virginia adopt a tax on food and beverages of up to FOUR (4) PERCENT, as authorized by Section 58.1-3833 of the 1950 Code of Virginia as amended.

During its August meeting, the board of supervisors unanimously adopted a resolution calling for the referendum and petitioning the Circuit Court of Buckingham to put the non-binding referendum for a prepared food and beverage tax on the November ballot.

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The action followed a discussion on exploring the feasibility of enacting a meals tax to help generate additional revenue without placing more of a burden on real estate taxpayers. On August 15, the court granted the petition.

At the September 10 board meeting, County Administrator Rebecca Carter told supervisors that the registrar shared that she is receiving questions about the referendum. In turn, the registrar asked Carter to prepare an information sheet to help inform voters on the issue.

In their board packet, Carter provided supervisors with a copy of a draft of the information sheet she prepared and asked them to review it and let her know if there is any information they thought should be added or deleted.

In the proposed information sheet, Carter advises that the referendum is non-binding, which she explained means the board may consider the possibility of the tax regardless of the outcome of the referendum.

However, she added that the purpose of the referendum is not only to comply with state requirements before such a tax could be levied but also to hear from citizens regarding this possible means of bringing additional revenue into the county.

Carter explained, “Due to the rising cost of all services, decline in state and federal funding, and the continuing costly state/federal mandates, the board of supervisors wishes to consider alternative means of distributing the cost rather than most of the responsibility falling on the real estate taxpayer.”

According to the information sheet, a tax of up to four percent could be levied on the purchase of all prepared food and beverages served in and from restaurants, eating houses, dining rooms, eateries, grills, bowling alleys, coffee shops, drug stores, and cafeterias.

Additionally, the list encompasses prepared food and beverages served in and from lunch wagons/lunch trucks, cafes, pushcarts, snack bars, carry-out, lunch counters, caterers, delicatessens, gas stations, confectioneries, food concessions, and bakeries.

Continuing, the list includes motels, hotels, doughnut shops, grocery store delicatessens, carnivals, ice cream stores, dinner theaters, festivals, bed and breakfast inns, private clubs, convenience stores, recreation clubs, non-profit organizations, and concession stands.

If the board should decide to enact the tax, all businesses that come under the definition of restaurant or caterer and listed above must collect the tax from their customers when the charge for the food and beverage is paid. The seller would add the tax to the gross amount and collect the total from the customer.

The document outlined that the seller must complete and sign a monthly report indicating the amount of the food and beverage charges collected and the tax required to be reported.

According to the information sheet, all forms along with a return envelope would be provided to the seller at no charge. In turn, the completed forms along with payment would be submitted to the treasurer by a determined day of the month.

Record retention, as explained in the information sheet, would require the seller to retain for three years auditable records of gross receipts for all foods and beverage; records of food and beverage purchases; and records of spoilage, waste or other purchases to support the food and beverage operation.

Additionally, the seller would be required to retain for three years auditable records of the amount charged the buyer for each purchase, date of each sale, deposit records, cash register tapes, voids, daily worksheet, etc.; and, the amount of tax collected from each sale and exempt sales.

The proposed information sheet also noted that gratuity, service charges or tips that are mandatory or automatically added to the price of a meal by the seller would not be subject to the tax UNLESS the service charges or tips are in excess of 20 percent.

In such cases, the service charges or tips that are 20 percent or more and added to the price of the meal would be subject to the meals tax. However, according to the document, any tip or gratuity paid and not added to the bill would not be taxable.

During her report to the board, the county administrator said the move to the new building should begin the week of September 17.

She said the “flush-out” began on Monday and they were waiting for the air quality report, which would ensure the LEED certification. Carter advised that she would keep the board posted as to when the offices would be closed for the move.

In an update, the county administration offices will be closed Wednesday, September 19 through Friday, September 21, for the move.

New Mandates for Stormwater

Although she planned to provide a PowerPoint presentation of the new mandates from the state regarding stormwater management, with the meeting closing in on its third hour, Carter said she would forego the presentation and cover the highlights. She added that the information would be available in her office.

Carter shared that in her opinion the stormwater management program was a paramount state mandate that was going to be expensive for the county.

She explained that the stormwater regulations became effective September 13, 2011; and, local governments must show substantial progress by April 1, 2013, to be granted an extension.

“The implementation date will be July 1, 2014,” stated Carter, noting that the next step for the county is to develop a stormwater program. That program must include ordinances, funding/staffing plans, policies and procedures, and agreements if a regional approach is taken.

The county administrator explained that one of the first steps would be determining whether to take a regional or local approach.

Noting that she has met with the Commonwealth Regional Council, Carter stated that a regional application is underway to request grant money from the state. She added that if the application were successful, the grant would be used for assistance in developing the plan and exploring whether the localities would benefit from a regional approach or several counties working together.

Moving on to the stormwater general permit fees, Carter prefaced that the fees would affect the citizens of the county. She explained that for small construction not only would the owner be required to obtain the well and septic permit, if applicable, and the building permit, but they would also have to secure a stormwater management permit.

According to Carter, the permit fees could range from $290 for small construction on up to one acre to $9,600 for large construction of 100 acres or more.

Supervisor Staton added, “In case you don't get the point, this is coming down from the State of Virginia. This is what we have to do.” He offered, “The only way you can stop this kind of thing is through the General Assembly.”

Carter explained that localities would retain 72 percent of the fees with the other 28 percent going to the state. She said the state would use its percentage to ensure localities are enforcing the regulations.

Although localities would have the option of increasing or decreasing the fees, Carter said that they would also have the responsibility of administering and enforcing the stormwater regulations.

“I just want to make sure that everyone knows that this is state mandated and we'll have to take the responsibility,” concluded Carter.